Thursday, October 15, 2009

Technical charts roundup shows negative divergence creeping into equities markets charts

The equities rally hasn't proven it's finished, as it poked a new high and some analysts are focusing on higher levels such as 1106/1109. Swing trading discipline calls for waiting for a trigger sell day before venturing into a swing short. Besides, I'm still so glad we pointed out that equities were at a "buy the dip" point back about 1020 when testing the 50-day moving average - and most longs should still be intact on a swing basis for the sane reason, no trigger sell on the daily chart yet. So just consider this technical charts roundup for the following message: Negative divergence is creeping further into the charts, so the next selling crest should be more significant than the last several. When you review the charts below - a collection of my favorites that take the markets' pulse and measure internals strength - you'll notice that many show negative divergence compared to the higher indices' prices. For example, the percent of index stocks above their 50-day moving averages, and the percent sporting bullish P&F charts, are at lower highs despite prices at higher highs.





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